Q3 2020 Newsletter
2020 Q3 Newsletter
October 1st 2020
It is hard to believe that we are heading into October, in one sense time slowed down during the lock down, in another it seems we missed summer completely.
We were each able to get away for the odd weekend trip on either the Island or the interior, which helped recharge the batteries after a few stressful months. But Covid still seems to dominate conversations and news on TV. Numbers are starting to creep up again throughout the world, and Canada is no exception. With restrictions loosening and the capacity to increase the number of daily tests, this could be an expected result. However, we are still hopeful that everyone is staying safe and taking the necessary precautions.
As we start to adapt to the new normal it is encouraging to see some of the advancements in ideas. The sporting world is a great example with the NBA and NHL each having success in the environmental ‘bubble’ they have created. It is weird watching games with no fans (or virtual) however we are grateful sports are back on.
We don’t need to tell you that all eyes are on the upcoming US election and the fight over a new Supreme Court nominee. The New York Times report on Trump’s taxes makes us wonder what the prosecutors in The Southern District of New York have uncovered so far. These new revelations are unlikely to sway his supporters, but may be one more factor for those who are undecided. More on this below.
Advisor Conference: Upcoming Changes
Last week we attended our advisor conference. Quite a change from last year as everything was done digitally and although we missed the social interaction of speaking with other teams, we sure enjoyed the flexibility of being able to watch it in the office.
There are a couple of changes being made that we wanted to share with you:
The company is in the process of launching a new online client portal to view your investment accounts, access performance data, get tax documents and other information. Our Digital Solutions team are very focused on making it easy for you to enroll and gain access. We will be in touch shortly about what to do. These changes are coming into effect before the end of 2020.
The firm is in the process of creating a mobile app for the client portal. Estimates are it will be complete at some point towards the back end of 2021.
Overall, we were incredibly pleased and excited with the direction the firm is heading. Over the last few years, they did an excellent job at taking advisor feed back on various topics and have implemented changes that should benefit everyone.
Picture Source: Food Banks Canada
Annually the conference always selects a charity to support, and this year it was the Food Bank of Canada. A charity that helps underprivileged families have access to healthy foods. This initiative was on most of our minds as COVID has really affected lower income families. Collectively, both the advisors and firm, we were able to raise just under $40,000.00. Should you choose to donate please visit the site here: https://www.foodbankscanada.ca/
Market Trends and Updates:
Over the last number of weeks, we have heard from several different pension/fund managers and economists that the pandemic has accelerated the adoption of a number of trends. The take up of both e-commerce and tele-health will be greater now than if the pandemic had not occurred. Our ability to use these services is due to the digital transformation of global businesses and governments, which will depend on Cloud data centers and increasing the ability of “data mining”. What was expected to take 7 to 8 years at the end of 2019 will likely now be achieved in 4 to 5 years. It does make us wonder why some improvements were not implemented earlier: as an example, Jack had to renew his driver’s license, an appointment was made online and he completed his renewal at the ICBC office within 10 minutes.
In a presentation at our conference, one manager highlighted that this is the first year since 1900 where we have experienced all four of the following in the same year: major environmental issues, a pandemic, social unrest, and a highly divisive contested US Presidential election. Thus, feeling a little overwhelmed seems a natural reaction!
July and August picked up from where we left off in June with markets having strong rallies and at times looking unphased by the global pandemic. September volatility brought us back to reality, and markets have attained more reasonable levels. This may have been caused in part by profit taking and a global resurgence in rates of new COVID cases. Central banks around the world are going to continue to keep interest rates low for quite some time which indicates the impact this virus is having on global economic activity.
If you are an avid reader or listener to market news, I’m sure you have now heard of the phrase V or U shaped recovery. This is a term used to describe the direction of markets over the last 8 months, with a sharp decline followed by a sharp incline. One fund manager suggested a better way to think of this recovery as being K shaped, with certain sectors doing well and others doing poorly. As mentioned before, technology has been the major driver in the stock market recovery, it continues to improve our personal and professional live. Sectors such as commercial real estate, banking, tourism/travel, industrials, and utilities have lagged. These sectors likely will not start to turn around until we have more certainty on the containment of the virus and unemployment numbers start to reduce back to pre-COVID levels.
US Elections
Picture Source: CNN
We find this question so common whenever a US election is approaching. From an investment perspective we are not overly concerned on who wins. If President Trump is re-elected most of his policies have already been implemented and therefore would not have any major impact on companies. Biden on the other hand is a centrist, known for working on both sides of the aisle to come up with solutions. His main fiscal platform currently discusses increasing the tax on very wealthy individuals, and to adjust corporate tax rates, but keep them lower than before 2017. With any politician, a primary goal is to keep the party electable and this won’t happen with drastic 180-degree policy shifts. Changes in power may result in short pockets of volatility, however over longer periods of time most North American governments do not have a huge impact on markets.
Historically the US market has performed better in times when Democrats are in power.
Picture Source: Netflix
Unlimited Paid Vacation?!:
Technology companies continue to push boundaries with innovative ideas and solutions. Some are now changing the traditional way employees are awarded paid vacation. Netflix offers their employees unlimited paid vacation. There rationale is simply that unlike in the industrial economy (like factories) where people are measured by how long they work on the job, such as 9 to 5, the technological economy is more focused on ideas and inspiration. If someone does this in 8 or 4 hours a day is irrelevant to the company. Therefore, why should they measure if someone works 50 or 48 weeks of the year.
Interestingly enough, Netflix said on average people take 18 business days off per year.
This video can be seen here: https://www.bloomberg.com/news/videos/2020-09-09/why-netflix-offers-workers-unlimited-vacation-video
Thanksgiving Recipe:
Glazed Root Vegetable Tarte Tatin:
2 medium carrots, peeled
2 medium parsnips, peeled
2 small sweet potatoes, peeled
2 turnips, peeled
1/4 cup olive oil
sea salt and cracked pepper
1/3 cup of water
1 cup of sugar
1 TBLS of red wine vinegar
100g of parmesan cheese sliced or grated
4 sheets of frozen butter pull pastry, thawed
1 bunch thyme
Preheat oven to 425 F. Slice carrots, parsnips, sweet potatoes and turnips into 1 cm thick rounds. Divide between 2 oven trays and drizzle with olive oil and sprinkle with salt and pepper. Cook for 30 minutes turning half way through.
While vegetables are roasting, place water and sugar in medium sauce pan over medium heat. Cook until sugar has dissolved. Increase heat to high for 6-8 minutes, stirring as you go, until light caramel in colour. Remove from heat and carefully add red wine vinegar, stirring to combine. Immediately after, pour caramel into a large roasting pan. Arrange vegetables on top of the caramel and top with cheese. Then place 4 sheets of pasty over the top of the vegetables allowing 1 inch to overhang around the edge on pan. Press pastry to seal and tuck in the overhanging edges.
Reduce oven to 400 F and place tart on an oven tray to catch spills. Bake for 20 minutes. Then reduce oven temperature to 350 F and bake for another 20 minutes. Remove from over and let stand for 5 minutes before inverting onto a board.
Top with thyme and cut into squares to serve. Serves 8-10.
In Conclusion:
It has been an unusual and stressful year for everyone and while there are hopeful signs, we still do not know when life will return to some semblance of normality. We hope you are able to keep close to your friends and family and we wish you a Happy Thanksgiving.
Jack Fournier, B.Sc., FMA
Investment Advisor
HollisWealth, a division of IA Securities Inc.
Insurance Advisor
Hollis Insurance Agency
Tel: 604 895 3348 / 1-800-665-2030
jack.fournier@holliswealth.com
Travis Kidson, B.Sc., CFP®
Investment Advisor
HollisWealth, a division of IA Securities Inc.
Insurance Advisor
Hollis Insurance Agency
Tel: 604 895 3486 / 1-800-665-2030
travis.kidson@holliswealth.com
This information has been prepared by Jack Fournier and Travis Kidson, who are Investment Advisors for HollisWealth® and does not necessarily reflect the opinion of HollisWealth. The information contained in this newsletter comes from sources we believe reliable, but we cannot guarantee its accuracy or reliability. The opinions expressed are based on an analysis and interpretation dating from the date of publication and are subject to change without notice. Furthermore, they do not constitute an offer or solicitation to buy or sell any of the securities mentioned. The information contained herein may not apply to all types of investors. The Investment Advisor can open accounts only in the provinces in which they are registered.
*Insurance products are provided through Hollis Insurance Agency. Only services offered through HollisWealth®, a division of Industrial Alliance Securities Inc. are covered by the Canadian Investor Protection Fund.